today after posting shall mixed results in april. take a look and you'll see the dow extended its monthly winning streak to seven months just by the skin of its teeth. up by 0.01%. >> talk about the smallest of smault gains. s&p and nasdaq did post their first monthly drops of the year. s&p was down by less than 1%, the nasdaq off by almost 1 1/2. for the s&p, it was the worst monthly performance since september. we also have a few economic tests for the markets today. coming up at 10:00 eastern time, we have the ism manufacturing and construction spending. also the automakers will be reporting their april sales pigs. san francisco fed president john williams suggests that he is more optimistic on the economy today than he was back in january. also richard fisher is saying

that he suggests the fed night need to push rates lower he did stop short of calling for outright monetary tightening. >> and among the stop stories we're following in the corporate world, coke saying there is no deal, we'll have to talk about this later, guy, the world's largest soft drink maker shooting down a "wall street journal" report that saids of in talking to buy energy drink maker monster beverage, but that company valued at more than $11 billion. that sent stock to an all-time high before coke issued a stapt disputing the story and you've seen that stock drop. also today, a group of new york city pension funds will vote their nearly 5 million shares against five walmart direct tod. a report of alleged payments of bribes in mexico. walmart will hold its annual shareholder meeting on june 1st. and bp reporting a bigger than expected drop in quarterly troft

came. production fell after the company was forced to sell fields to pay for the gulf of mexico disaster. this offset an increase in crude prices. output will continue to decline in the second quarter as it sells mature fields in the gulf. and the irs is reviewing issues related to chesapeake's perk that granted thousands of wells that the company was drilling, the program granted and you bring mclendon a right to take a 2.5% interest in every well the company drilled. and caterpillar expects a strike early this morning at an illinois plant after talking with the union broke down yesterday. workers there overwhelmingly turned down a new six year contract, the world's largest maker of construction machinery does not expect a strike to disrupt production at this point, though. joe. >> and let's check on the

markets. futures after a lot of action yesterday with very little final result were kind of starting the same way this morning. i love the story about the fed guys after krugman's piece over the weekend that the fed hasn't really done anything to help unemployment. but we're down about three points or so after about a 15 point yesterday on april 30th. we'll check out the oil board. about 104 and been there for quite a while. the ten year will be impacted as it was by the gdp report by the employment report this week, but we're all the way down to 1.91%. a lot of stuff coming out of europe on the push back against austerity. you can push back, but it's such a disparate region, germany is the one that can end the austerity and they're not going to end the austerity.

>> you can see the tensions rooting. and angela merkel is up for her own re-election next year. >> but everybody else is movi moving -- did you see jean claude quick because he's tired of germany and france acting like they're the only two that matter. but then again, withey are the only two that matter. >> hard to take 5,000 years of separate cultures and ways of life and fiscal responsibility and then all of a sudden put it together and expect it to work. finally gold was in the high 16s recently, down about 3 1/2 today. time for the global markets report. we've got a man who is -- you can call england europe? i know you think of the british empire wasn't really attached or anything. ross, how are you? >> i'm fine. not much going on. we have a lot of may day rallies because it's may the 1st.

but that means most of the european markets are shut so no heat map today. indeed only three countries straighting today. denmark, ireland and the uk, so just going to focus in on what's happening in the uk. foot city 100 up 13 points this morning. andrew mentioned bp. the stock has been down at the bottom of the ftse 100, right for you off 3.33%. bigger than expected drop in profits. they've had to sell assets to pay for the gulf of mexico oil spill. quarterly profit pretty much in line with expectations. had onset aside more for

mispayment selling of insurance policies. also another set 500 million pounds a share buy back and saw a return to sales. sl% drop in copper production. also data out of the uq, the flash printed gdp last week showed a return to recession. our manufacturing pmis came in wakeser than expected for the month of april, 50 point five. the new export orders down the low he is. weighing on that eurozone debt crisis certainly having an impact.

pmis weaker because of the euro son. that's where we stand. it is a thin stock market traiting day here. back to you. >> ross, thank you very much. it's may today there and it's may day here. there are protests planned in a number of countries around the globe. rallies throughout asia demanding wage increases. peen ti meantime marches are planned. and back here the occupy wall street movement has plans to mobilize in bryant park which just happens to be across the bank from bank of mirkof americ headquarters. there have also been powder in envelopes september to wells fargo, six different branchs. occupy wall street hasn't taken credit, but the suspicion is that it was. that's terrorist you start

sending white powder to people. >> jimmy kimmel just one light note on this, he said in his day, protesters used to march. you used to expend energy. today they're so lazy, we occupy. we don't even march anymore. you get there and you just plant yourself. did you see barbara walters? >> that was the best joke. >> 20 years ago she tweaked her dog. that was one of the highlights about. >> i thought the president did an incredible job. >> he's always good. >> i wasn't will last year, this year it was a wedding. >> andrew, you were worried about the dog jokes. i thought that was great. >> the idea that he could mf-the joke that i read was he took a arrive off sarah palin and said what's the difference between a hockey mom and pit bull. pit bull's delicious. that's great take he couhat he

it around. >> i don't think you like it because you and gail have spent so much time on the shamus -- >> the whole thing was the shot of the 747. >> air force one with shamus on top of air force one. >> but anytime if the president is going to make fun of himself eating dog, you think that undermines your whole shamus character as satisfies natiyi a any. gail spent 50 columns writing about it and now she just looks silly. >> eating the dog is -- >> i'd rather ride somewhere and go on vacation than go to a ken nell. and i certainly don't want to be eaten. anyway -- >> let's get to other news. british parliamentary ghit i will issue its verdict on the news corporation phone hacking scandal today. they faced questions from the committee last week. the group's report is due out at 6:30 a.m. eastern. we'll bring to you as soon as they break. and another high profile name to watch today, dominique

strauss-kahn, this morning a new york state judge will decide whether to dismiss a civil lawsuit related to sexual allegations against the former imf chief. >> a top executive at freddie mac is leaving the mortgage buyer. anthony renzi was appointed about a year ago. he responded to political pressure earlier this year by slashing salaries for the ceos of the two firms and ruling out bonuses for many top executives. freddie mac ceo also expressed his desire to step down. spencer backus has been cleared in an insider raiding probe. top republican on the financial services committee. i don't know whether he escape this had by the skin of his teeth. you said that earlier. what does that mean? >> it's that nasty film on your

teeth that -- >> so so thin that it -- >> there really is no dozen on your teeth. >> but that is the whole point. there is no point. you can feel it, right? >> no skin on your teeth. >> now you're freak me out. you took my stupid little -- >> yeah, i heard it over there. in my caricature, they had me looking like madonna. >> that can never be seen. we'll get you -- >> but you do they'd one. i've been waiting for a long time. i want one because i want the mug. >> we're working on the mug. >> i think if it they just changed the eyebrows, i think that is it. >> we'll have to talk. >> are you going to talk to help

or read him the riot act sf. >> no, we'll just talk. >> all right. threaten his family? >> we don't like the original. we want a new one. when we come back, we'll check in with today's national weather forecast. plus we have a live report from washington. newt gingrich is expected to officially drop out of the race for president today. first, though, before we go to a break, we are preparing for the kentucky derby this weekend. more than 40 teams took to the track in louisville, kentucky with prizes for the fastest times. the best decorated bed. the most entertaining. and of course the people's choice. >> the kentucky derby coincides with the berkshire hathaway annual meet somethiing? >> almost always does. they have so many people going to the berkshire annual meeting and so many going to the kentucky derby that it tends to be the biggest weekend for them. the bed races are part of the festivities leading up to the derby on saturday. there's the mug.

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dow looking like it will open a little lower. nasdaq also off, as would the s&p. making headlines, fidelity saying that 401(k) balances grew by an average of 8% in the first quarter. but 80% of the increase was result of market performance. rest due to contributions by their workers and their

employees. and sears holdings says it sees first quarter earnings with $1.46 and $1.84 including items that's unlikely comparable to options which were for a loss. same store sales at both sears and k-mart declining, but sears did achieve double digit increases in apparel and footwear oig. offset by declines in appliances and consumer electronics. >> now to today's national forecast. i assume weather is what we'll be talking here. could be a stock forecast. >> or an economic forecast. >> scott williams joins us from the weather channel. there's thunder and lightning and rain back here, scott, but i will say it smelled like spring. and it's not really a cold bad -- >> it's warmer. >> and smelled like green. not money, but it smelled like green as in trees. i was okay with it, scott. >> we made joe happy this

morning. we do have the rain and it's beneficial rain across parts of the northeast and new england. certainly a turn around from yesterday morning. we are we were looking at the frost advisories and freeze warnings. but as you you mentioned, we do have showers and thunderstorms especially around the greater new york city area. boston, philadelphia, washington, d.c., getting wet this morning. so as we zoom in a little closer right now, if you do have travel plans out of philadelphia international airport, toward jfk, la guardia, expect airport delays because of showers and some thunderstorms moving through the region. washington, d.c. getting wet, as well. so hour by hour across the region, look for showers and some storms. we're looking milder temperatures washington, d.c., philadelphia in the 50s and 60s early this morning. a little cooler toward new england. but as we move hour by hour, that rain will be moving out of the region and by this evening, right around 6:00, 71 degrees, new york city, we're looking at upper 70s towards philadelphia

and lower 80s toward the washington, d.c. area. we're also tracking some showers and thunderstorms in arkansas and also sections of missouri this morning. north of the nashville area, showers and thunderstorms. thunderstorms this morning along interstate 94, moving through sections of central minnesota. so allow extra travel time there. south florida, clouds and showers in the forecast. new york city, moderate airport delays expected. cincinnati, minneapolis, as well, pack patience as we are looking at those delays. soo we have that frontal boundary on the move toward the northeast and new england. in the warm sector, we're looking at the temperatures in the 70s morning city, roanoke, 82 degrees. 76 in cincinnati. low 80s towards st. louis. minneapolis 77 degrees for the high temperature. into your wednesday, drying out across the greater new york city area toward boston, but we'll watch the system around the great lakes and also sections of the upper ohio river valley on wednesday. it will bring along some clouds,

showers and also some thunderstorms. so that's a look at your national forecast. guys, have a great day. back to you. >> scott, thank you very much. we'll go from weather to politics. john harwood joins us live from washington. and john, we hear that this is the day that newt gingrich is going to officially drop out of the race for the gop nomination? >> wow, what an earthquake that is going to be on the political landscape, becky. yes, we have heard that newt gingrich is going to do that. my -- i don't mean to be flip about it, but newt gingrich has long since ceased to be relevant in this this race. and the choreograph of his departure is really something that is mois most implicated is will he endorse romney. we saw back and forth the

general motors and osama bin laden and all the things that underscore how fast the vase accelerating. >> and the cover of "usa today" is talking about who wants to be the vice presidential candidate. they laid this out saying -- >> it will not be newt gingrich. >> they say it is almost like a reality show. for the first time, we get to watch the tryouts like spring training where we see everybody put on the stage, everyone from marco rubio to portman to condi rice. who do you think at this it point is rising to the top as having the biggest potential? >> we've got on discount all of the predictions from people like me from the outside because we don't know what's going on inside romney headquarters. we can see the various candidates being trotted out and good for help because gives them a little bit more sat chur and good for romney because he's associating himself with these rising stars within the party all across the country.

kel kel kel kelly ayotte. marco rubio, all across the board. my feeling is that mitt romney will want a pick that yubd scun everything that sarah palin was not. he's trying to run a confidence campaign that barack obama is in over his head in this job, he can't handle the economy. can i handle it, and to me that deck at a times a choice of like rob portman from ohio. >> if not portman, who then? >> mitch daniels would be an excellent joyce. mitch daniels is very successful governor of indiana. indiana will not be a swing state will time. republicans are will carry it. but mitch daniels like portman is somebody who draws broad respect across the political spectrum, he's somebody who is not a firecracker, he's steady, intelligent, he has credibility on economic and budget issues.

>> but his wife didn't want him to run for president. would she be okay with help running for vice president? >> republicans that i've talked to tell me they think it is a different deal when you're talking about a shortened campaign where you're not the principal candidate, you are asked to join the ticket, it lasts for a few months. you've got a 50/50 shot to win and it is less pressure on the spouse than running a full bore campaign in which all of the scrutiny of the press comes on you. so the betting that i've heard is that he would -- he should be considered eligible should romney want to pick him. but rob portman is somebody, ohio is a swing state, unlike indiana. >> we need a guy from cincinnati on the ticket, i think. i want to go fact to gingrich to make a point. and that was at the correspondents dinner back to that, but the reason these guys stay in the race so long, they're spending other people's

money. right. santorum flash bulbs were going in the very front where the front tables were and the flash bulb were him and lindsay lohan. but george clooney. and george clooney shaking his hand and he was bigger than life. it's rick santorum. pop, pop, pop! and the biggest stars of the place. and there's rick santorum in bright heights wilights. why not? last thing he did was lose by 17 points in pennsylvania. now he's at this celebrity fest and george clooney is like, senator, how -- it's bizarre, john. and it's bad because it's kind of a celebrity -- and then you go get a gig on a cable chlttv channel, right? >> that is a potential product at the end of the rainbow for santorum. >> even though i don't want to be president, in for yourers -- that's right, i'm already on a cable show. but i want to give my opinions.

>> that's right, that would be a new thing for you. >> are you going to stop pretending to be neutral? >> oh, yeah. >> at that time mask off. >> yeah, heal thyself, physician. how is the campaign going in today is trump tuesday. he knows how to use the power of the potentialrd city. >> so when is trump going to drop out? >> he's in and out. he may get back in. who knows. but condi, you saw the piece in the journal that says she has bags baggage. she was gechagainst the surge - >> if you have long enough political career, they'll find something. >> daniels and portman both have bush baggage. >> well, they will be attacked for having been budget director for george w. bush. my own feeling is that those attacks aren't that powerful. >> at least we had a budget back then.

>> i think they're more powerful vulnerabilities for condi rice simply for the fact that mitt romney's stock in trade and hits calling card will be i can fix the economy. is that whatdoleezza rice is good at? i don't think so. d >> now that we know that the only guy that could get osama bin laden, he immediates to -- >> i think even andrew sorkin would have made that decision. the >> biden said don't. but i love -- that's one reason i'm mixeded abo about what happ november because i hate to see him goep. >> joe biden is a unique figure in american politics. he is somebody who -- he's got more regular guy in him for good

or bad, you never know what he'll say. than almost anybody that i've seen. and i've watched him a long time. he got elected before he was 30 years old to the senate. >> john, it's great to talk to you. we will see you again. when we come back this morning, we have a live report from london where a high profile committee is about to release its findings on the murdoch phone hacking. first, take a look at yesterday's winners and loser. zap technology. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork.

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good morning. welcome back to "squawk box" here on cnbc. it is 6:30. i'm joe kernen along with becky quick and andrew ross sorkin. cme group will reportedly extend trading hours for its grain contracts. chicago exchange. it is moving to defend it turf against the fwoid nearly round the clock transactions. and australia central bank cutting its main cash rate by aggressive half a point today. policymakers say inflation would likely be lower than expected for the next two years. comments leave the door open for

further easing if necessary. china's pmi rising to a third month high in in april. they stole it from us obviously. the slightly short like everything, slightly short of expectations. the number signals that the economy has found a footing and may be recovering, but smaller factories are still struggling. kevin ferry chief market strategist joins us from the cme. i've gotten some correspondence from you in relation days. >> it's been fun. >> i love the krugman piece. the fed finally needs to get off its ass and do something because they haven't done anything to help unemployment. so -- and then i also leak when we had bart chilton on who wants to make sure you can only have a certain amount of position in oil like 10%. i asked him does that mean that

the fed can only own 10% of the ten year? and he looked like he -- they own 50% already. and he looked like he's like don't ask me that. the administration hasn't thought that one lieu. depends on the market and whether you you like where the price is as to whether you want to control the speculators, right? >> you can have all the bonds you want. that's right. >> i missed him. it was friday. >> he is cool looking. people were writing in saying he looks like a james bond villain. which implies evil. i won't say that's absolutely true here. what's going on today, kevin? now we're all feeling bad for europe. they need to start spending again because as we know, government spending is a panacea. >> feeling bad is the new normal i guess. so the aussie is down a little over 100 this morning. most people are in the expectation of 25. they gave 50.

i think the other thing that i'd be watching out, the only thing that did good in april was bond market. and so i think treasury is doing better than corporates, high yield than anything else on the table really shows that the growing trend of the month was fear and trepidation about something going wrong in the future. >> 1.91. we won't get to 1%, will we? what will that mean some you wouldn't rule that out on the ten year? >> no, everything's on the table. it doesn't mean that i would necessarily be participating in it. i think that, again, let's make -- here's what i would say. make the grains trade 24 hours a day so we can watch them not move for another eight hours. i think that what you're really seeing in the trading community

was a positivity of ideas and very limited opportunity to dash in and out of the market on a short term basis. so if it is going there, i'll be playing somewhere else is all i can tell you. but for right now, the curve is pancaking and we're all going down on the floor. >> all right. i don't know what that means necessarily for the number on friday that we get. do you think gdp report re got last week gets revised up or down? >> i would still mark it a little higher. that was a disappointment. we thought maybe at the end of march we would see will. but the data cluster is coming in weak. that's completely normal right down to the pmis. we want help to stabilize, but if you look at past cycles, this is what you you see is a normal

cluster of weak data just coming a month later. so i think that information is well in to the market now and the own is negative. >> does that mean we've seen the highs of the year as some people suspect? that's what happened last intwo years in april. >> people that i respect really are tracking this market a lot like last year's. and so i'm giving that a decent amount of risk. but i would say that all other things being equal, i see things -- people far too afraid of like europe or the possibility of what we think is a repick up in the numbers as we go into summer. >> i agree. i'm so glad to hear you say that. >> i think one of the things that we picked up on yesterday when rick was interviewing the girl from the chicago pmi, i think it buried the lead. the headline number was weak. but she saw a nearly unanimously

strong outlook for the summer. and i think that these people are -- the purchasing manager is the first forward looking number that we get. so i think it was significant that she pointed out that the forward survey was very strong. >> all right, kevin, we'll see you again soon. >> is trading closed in paris and germany and spain because of may day? is that the deal? because somebody pointed out it still has yesterday's closes. >> right. you have to check anymore just to make sure it's open. but, yeah, throughout europe, that's a ton of people out. so i think that will be an influence here again today, also. >> all right. again, we'll see you later. we do have breaking news out of london this morning. a uk committee releasing its report on the murdochs and phone hacking scandal. and the news is not good.

katherine boil joyle joins us l from london and kayla tausche is onset with us. but let's go to london first. >> you rupert murdoch was subject to a scathing at being a from british mps who said is he not a firt person to run a major international company. and this comes as he's already facing calls from shareholders to step down late they are year. and also incredibly critical points from this report. they said there was a major failure of corporate governance to news corp over the phone hacking scandal and also criticized james murdoch, said it was astonishing that he did not ask more questions like just how far the scandal went. let's not forget this is a chance for british politicians to turn the tables on the murdochs after they were subject to a lot of criticism themselves. >> katherine, thank you so much for about that report. we appreciate. kayla is onset. this is pretty damning stuff.

>> it is. and remember the two teams before last week that rupert and james murdoch appeared before the parliamentary committee, july of 2011, november 2011, this is that select committee releasing the report on their findings based on that testimony. two words i want to point out from a legal perspective. rupert murdoch not a fit person. fit is a key word because at the moment, the uk's version of the fcc is evaluating whether news corp is a fit and proper owner of bskyb. so if uk politicians are recommending rupert is not a fit person to run the company, that could have implications from what we see and whether news corp is allowed to own bskyb. secondly, willful carries a hint of sbenintent. >> so from the corporate perspective, we'll watch what happens to the stock today.

with a are the possibilities? >> a little bit above my pay grade, but -- >> go worst case. >> worst case scenario is clays ca chase carey is running the company in a few weeks time. we're also expecting the report from the internal management and standards committee sometime toward the end of may. that keeps getting pushed back and they'll want to come out very heavy handed. tell's want to show that they're acting independently, not acting in alliance with news corp's -- >> but could for example they be forcedbskyb? >> i think it's a real political possibility. whether you think it's real or fake depends on -- remember, they created bskyb. >> could he put david kerry in charge and remain as chairman and everyone will think david is a puppet for rupert? >> chase carey.

>> sorry. >> what andrew is getting at, a lot of people think this is a dog and phone any so ony show. but will there be real repercussions and is there a way to handicap what happens. >> the stock has reacted positively in front of these commit theities. they're built in sound bites. they come out guns blazing every time and it seems like the market has liked what they saw. this is real evidence that it wasn't working. that the fact that they didn't know that this was going on, that they didn't know how endemic it was actually isn't a type of defense that's actually going fly here with politicians where real regular election of these businesses is concerned. >> so it leads up to on you friendly the regulators are after all will? >> we should benchmark the reports that we also have coming out.

only by saying this is something that every newspaper was doing. it doesn't take any of the onus on of news corp, just says it wasn't limited to them. and then toward the end of may, we're expecting the management and standards committee to come out and earnings on may 9th, as well. >> he's 81, right? >> he's 81. and i think that last week in the wednesday hearing they ended about an hour and a half early -- >> is that a career cut short. >> he needed a nap after lunch p about he was getting confused going new the documents. >> 65 used to be the retirement age. thank god it isn't anymore. >> the fact that you mentioned willful, i also appreciated that phrase as a son of a lawyer. but is there a possibility for criminal charges against anybody with murdoch in their last name? >> i certainly believe so.

and nbc news pointed out yesterday that in the evidence that rupert murdoch provided to the inquiry last week, about 100 pages long, but buried in there, he had a written statement that he was cooperating that news corp was cooperating with department of justice investigations on bribery in china and russia. so now we're seeing some real mention of doj involvement here whereas before it was just a hint will of it. now we're actually getting a real written statement from rupert saying that there are doj -- >> okay. appreciate it. any comments or questions about anything you've seen, e-mails at squawk@cnbc.com. coming up, changes at groupon. high profile names in business that are involved. we'll have the details on that story right after this.

tomorrow the inaugural we can of the squawk book club continues. with author of accidental billion nars. and author of the wisdom of crowds. our guest host will be neel kashkari. and we'll get behind the wheel of high performance machinery. the president and ceo of ferrari north america will join us on the set. that's tomorrow starting at 6:00 a.m. eastern. need any help?

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welcome back to squawk. u.s. equity futures at this hour.

that's pretty much where we are. but making headlines this morning, groupon on appointing two directors to replace howard schultz and kevin erfusy. an attempt to address growing criticism over accounting practices. but this is an interesting story because howard schultz, it's for the just thatre-election, he's getting off the board immediately. and what does that say about his company. >> a little frightening and i can't take the hit anymore. >> there's been a lot of questions about groupon. >> stock at now half its offering price. so it's come back just from the offering price and that doesn't and you can about where it went up from will. >> and you contrast that with what schultz has orchestrated.

>> he was the star on the board. there's a number of other stars. there are big name people on that board. >> you figure some of these guys, what's in it for them to do it if it starts getting bad pr? >> if you look at the people that are being appointed, if the cfo you have american express, what does he want this for is this i really wonder. if you think there are des additional problems. >> it was the first one out there, the first move or advantage. but once the problems come, that's where people probably do a double take. >> i have heard from some stock analysts who how suggested that the problems are about as bad as they could be. therefore -- meaning that the stock is really come down, that if you wanted to have an entry point, that thousand all of a sudden this may make sense if a

way where perhaps some of the loftier prices didn't. coming up, what happens when joe, becky and i leave the building together? che with che which we do assigns. but when we do it in a $300,000 car. hill hilarity. a video you won't want to miss. all this week, we're kicking off the "squawk box" book club with some timeless books that belong in every business library. this week, we'll talk to michael lewis, and sir rich aard branso. we'll present the blue chip book award for classics like barbarians he gate and the wisdom of crowds. your summer reading list just got a lot longer. [ male announcer ] this is the at&t network...

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chairs is sponsored by wells fargo advisers. tomorrow on "squawk box," we're going to welcome the president and ceo of ferrari,

north america. to prepare for the interview, we decided to take to the highway and test a few cars. our headquarters are in englewood cliffs so there's a windy road that goes down to the hudson that we had warned the englewood cops -- >> the cops were told. >> -- that we were going to be using it. i drove that car as fast as i possibly could. >> i tried to. >> and i was riding with andrew when we first went down that road. >> that's you screaming. >> like please slow down! >> the one you were driving was 300 grand. >> and it had a back seat. >> what was the one we were in? >> 220. >> we were in the cheap seats? >> i drove after you left. >> a starter ferrari. it's called $200,000, a starter. >> and this is us together.

i thought you were going to kill me. >> that's why i got into yours. i did pass becky a few times on the palisades. is that called the palisades? >> becky's on the phone. >> we were lost. >> we were lost. >> the hatch back, the one that has the -- there is room in the back seat, adults can sit in the back seat of a ferrari. the sound of of the engine is unlike anything i ever heard before. >> i thought the one with the top that you had, the commuter car, what would you do with that thing? >> i would commute. >> you would commute in that car? that's what you do with it? is that a car you take out on the weekend? how do you deal with that car? >> i don't think people put 16,000 miles a year on a ferrari. >> when i said to the pr woman who was helping us, i said when do people drive this car? she said, well, this is an every day car, the $300,000 car we were in was an every day car. >> i would use it every day.

but you'd get a few tickets, number one. >> yes, you would. not you. >> my daughter's legs are about and both of them are growing so it's hard to get in the back. >> but that one was pretty comfortable. >> we're going to show something. i don't know. about a seat -- what is this? >> too big for a seat belt. you're busted -- >> i'm busting out of the seat belt? >> that seat belt doesn't work on you. you're tall. >> i don't remember what that was about. we got to run. somebody read this story in the wall street journal, how couples stay together after an affair. it's the story of the morning. coming up, the "squawk box" book club is recovering this morning -- or returning. we're not recovering. our next blue chip award goes to -- do you know who this is, one of the greats of all time, burton malkiel.

first we're going to welcome today's guest host, former governor and senator, now goldman sachs adviser judd gregg. ♪ ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪

. a ground breaking buy. delta airlines confirming the purchase of an oil refinery. could this deal be a game changer for the industry? richard anderson is here with the details. >> our blue chip book award series continues. today, one of the top minds in the business world joins us. >> he's back from europe and he is ready to go. >> you will see the destruction of a course, a great jewel of scotland has been destroyed and i'm not going to let that happen to what i've created.

>> donald trump defends his properties all over the world and more. the second hour of "squawk box" begins right now. good morning, everybody. welcome back to "squawk box" on cnbc. we have pfizer's earnings for you. joe's been going through the numbers. looks like they beat at least on the bottom line. >> the revenue number was okay but the guidance for the year of $58 billion to $60 billion is below the estimate of $62 billion. i've got an adjusted forecast of 215 to 224 and the estimate is 226 that the street has. the revenue number for the year and the earnings per share number for the year is below where the street is. >> they're saying 214 to 2 24.

>> 226. 214 to 224 but 226 is where the street is. >> then the reported income, there was a reported income in the current quarter and for the year, it not apples to apples but the reported net is $1.23 to $1.38 but that's not the number to compare to expectations and we know what pfizer has been dealing with with lipitor, the biggest selling drug ever on the planet going off patent. 3.8% yielder. >> okay. >> what's the amicable settlement? >> brigham young -- >> i hadn't heard about it before. >> settlement on confidential terms. >> it says it with brigham young university and dr. daniel simmons versus pfizer. it sounds like it's been resolved. >> and they continue to expect to repurchase approximately $5

billion of common stock in 2012, the $172 billion company. >> viagra sales for the first quarter, $496 million. >> why do you look at me when you read that? >> i wasn't looking at you, you're projecting. >> i would say to welch, you keep pfizer in business. and he gets all mad. i said because of lipitor. do you take lipitor? he size i do. >> what about you? >> no, i don't. >> former new hampshire senator judd gregg. >> do you help fiez they are quarter? >> you guys used up by my calculation $4 a gallon. you guys used up my entire salary -- >> you know, what i watched -- it has a digital read out for

the guest host and as far as i drive it it did not move. >> by an eighth of a tank. >> how big are the tanks? >> it doesn't get great -- >> it not going to hit the cafe standard. >> can you turn on a dime. >> if they're not going to hit the cafe standard -- >> they shouldn't be in business, i agree. >> profits are so over. >> they make a profit? >> yeah, they do. they pry trito. we'll hear about that. >> we have richard branson in the 8:00 hour. he has interesting views about profits. >> this is such a neat case, delta airlines confirming it's biography conoco phillips refinery near philadelphia. this is the first ever attempt by an airline to own a refinery as they look for ways to battle -- usually i get a

"seinfeld" sound. there it is. >> joining us first on cnbc to discuss this deal, we used to play "mcgyver" music because it's richard anderson. great to see you and kate kelly, who broke the first details of the story nearly a month ago. richard, talk about taking a situation into your own. jet fuel we know after labor, is there anything that's more important to a company. but it kind of a novel idea to buy a refinery, isn't it? >> it's a great opportunity. the price of this refinery, it a great asset. essentially for the price of a wide body air plain we can own this refinery and control much more of our supply chain in terms of commodity costs. big ideas like this can create a lot of value for your shareholders. >> five years ago this refinery could have cost a billion or

more, correct? now you're getting it for $150 million if you throw in the subsidies from the state of pennsylvania, which were 30 million. >> correct. there are offers now to are a 30% premium to their trading price. i think we hit it at the bottom of the market. >> even that deal could be in a little jeopardy because of the deal with sunoco. you got beaten up quite a bit in the analyst community and the press in the weeks between this sort of first details coming out and the announcement yesterday. i know you're talking with investors and analysts yesterday and today to try to tell the story. why not do your hedging in the paper market? what is the problem with that? >> well, we do hedge in the paper market but there's no

effective way to hedge jet fuel cracks. >> you have to use crude or some other jet fuel. >> last year it made us about $4 million. jet fuel crack has gone up over 70% each of the last three years. >> okay. tell bus about the risk taking here for delta. it's a novel strategy. you are going to have some help from bp and phillips 66 who are going to swap, take some of your products like gasoline and diesel and give you jet in return. bp, as i understand it, is going to source and transport the crude across the atlantic for you guys. originally i reported had jpmorgan was going to do that bp roll and finance the product.

are you concerned about that risk? >> we're paying cash for the refinery. the agreement is from british petroleum. they will supply the plant and own the crude up until the time we refine it. and we'll go to max jet and produce about 50,000 barrels a day for jet for our northeast operations and we'll swap at other points in the u.s. all the other products produced with phillips 66 and british petroleum. >> okay. and this plant needs to go into turn around, meaning have some renovations done on the soon side, right? how long can you get the operations online and get that turn around completed? >> we'll be up and runs by third quarter. it should produce a payback within 12 months of the initial investment of about $250 million. >> what has been the reaction since the news was official from

your analyst? what are you talking about today and yesterday? >> since you first leaked the story, and by the way you got most of the facts right. >> thank you very much. >> she didn't leak it. somebody leaked it to her. >> somebody leaked it to her. >> she's going to tell us exactly how it all happened after the interview. >> our stock price is up 10% since you first reported the story. we're hopeful given the volatility of jet crack and the fact this is the fastest growing expense that we face and if you really look at the elements of what we did, we really mitigated the risk across the board. we're bringing in a professional team of refinery expert to operate the facility and we're going to keep all the conoco employees there. so if you look at the risk versus the reward, it a tremendous opportunity to pick up a great asset at a low point in valuation. >> richard, why is conoco

selling it if it's at this low level in the market? are they just fool snish. >> our effort here is very different than a refining company. we're vertically integrating to control commodity costs we face. if you think where commodity prices have really headed over the last several years, moving up the supply chain is critical for just about any industry, particularly an industry that is so commodity intensive. remember, conoco has a much larger facility just a few miles away. >> richard, to what degree is the success of this deal at least over the medium term, dependent on shipping crude oil from the bakken shale from north dakota which in a few years might be possible and might make this process cheaper for you

guys? >> it is not in the 300 million. bakken crude in the well head in the jumer midwest is much cheaper than brent crude and could be a tremendous opportunity for us. i think that's probably what some of the other investors that are looking at other properties there are trying to contemplate. there could be a significant margin expansion if we could get bakken crude into this facility. >> richard, two questions. one, do you expect your rivals to follow suit? should we see deals like this in the future? i don't know if there are deals available like this in the future. yesterday boone pickens was on cnbc and he made a comment because pennsylvania is subsidizing this transaction to the tune of $30 million that other airlines will look for similar subsidies. >> i can't speak on behalf of any of my competitors in terms of their business strategies. we'll really glad that the state of pennsylvania saw this

opportunity to save a lot of jobs and keep a big refinery open. we're making a significant commitment to the state and we'll be a good partner with the state. >> richard, were you able to feel a drop from 3% gdp to 2.2 at the airline in the last six months? >> no, demand has been strong across all regions. in our first quarter we saw both margin expansion and improved revenue in the double-digit range across our enterprise. >> and airline mergers, do we unmitigate -- undisputed success at this point, can we put it in the win column now? because they never work. >> no, ours worked. okay, you have to give us some credit here. >> i am. i want to you tell me. but you're mcgyver. you made it work, right? you're putting the wires together. >> we have a great team of folks. it took a lot of people working hard together but our merger has been a really big success.

we're on our third year of growing profitability and have hit our return on invested capital targets the last 18 months. so we've got a lot of momentum behind the merger. we think it gives us the opportunity and band width to now vertically integrate and tackle one of the biggest cost issues we have. >> would you be supportive of an american-usair deal? >> i don't know what the format will end up being but the industry from an industrial organization standpoint needs more consolidation. >> do you agree it's bad for consumers ultimately? >> no. if you look at the mergers that have occurred in the industry, this is an intensely competitive industry and all of the con s consolidation we've seen, you still have airfares including fees lower today -- you try sitting in coach with our obesity rates in this country,

richard. >> i do sit in coach. >> you get a whole row, probably. >> no, i don't. >> at least on delta, you can get wifi. >> on new york to san frfsco, a lot of competition and the rate have remained low. when you talk about usair and united continental coming together, on the routes not as popular, the rates are going up. >> i spent $1,400 to go to dallas last week from new york to go american. >> did you buy last minute? >> it was a little less than a week in advance but still. >> look at the value that you received in return. bottom line is fuel prices have a significant influence. >> you don't think on some of those less popular routes five years ago, i know you can use the overall average for ten years that the less popular

routes prices grg up? >> if you go route by route on an inflation adjusted basis, you still is v one of the best values today. >> the idea of labor versuses fuel costs. fuel costs are going up and up and often time those two costs run neck and neck in terms of which is larger but right now fuel is the biggest cost. if you're bullish on crude, which many people are, that's only going to get worse. >> that's correct. fuel price now is the number one expen expense. it doing it in a lot of other consumer industries. commodity prices are at all-time high, whether it food, metals or energy. >> you guys spend roughly $12 billion on fuel last year, correct? what's your projection for this year when this trainer deal factored in? >> if you factor in the trainer deal, we're probably up none p

anoth -- another $5 billion. >> how much do you expect to save from having that refinery? >> we have a lert from the s.e.c. where we'll net the economics of the refinery against our fuel bill and our conservative estimate is around 3d 00 million a year. >> richard, we appreciate your time today, being so forth coming. and kate kelly, a personal trip to dallas? >> no, that was a business trip. >> and you were in coach? >> yeah. >> let me give you my agent. his name is ari. >> have to work on my contract. >> back in the back of the plane you were. call him -- >> i think i was in row 28. right next to where somebody vomited. >> were you at "the wall street journal"? >> i still have to talk to richard about using my sky miles. >> you have a better lawyer. >> i don't have a lawyer. >> coming up, it's trump

tuesday. we missed donald last week while he was in scotland. he's back and ready for his weekly segment. and later, world bank president, robert zoelick will join us and sir richard branson who wants to screw business -- >> that's the title of his book. i want to make it clear to listeners. it's just another way you'll be traveling at the speed of hertz.

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. welcome back to "squawk box." let's get you caught up on stories reporting this morning. pfizer just out this morning. it's may day and there are protests planned in a number of countries, including in europe over government-imposed austerity measures. back here in the states, the occupy wall street movement has plans to mobilize in bryant park, after news yesterday there were some envelopes isn't, some speculating from occupy wall street members, to banks cl including wells fargo. and the leader of blackberry's research in motion to speak at the world conference today.

he'll be delivers a speech at blackberry world. it comes as rim isoned goi-- is undergoing a comprehensive review. take a look at where the stock is going. and looking at the futures, looks like the dow would open up 10 points higher. if you have comments and questions about anything you see here, you can e-mail us and follow us on twitter. up next we'll talk politics with our guest host. and our next inductee into the "squawk box" book club. the professor of economics whose book is considered a must read when starting a portfolio. this is a classic. and a random walk down wall street in just a minute after the break. time now for today's aflac trivia question. in this day in 1988, what song

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now the answer to today's aflac trivia question. in this day in 1988 what song by inxs reached number one on the billboard hot 100 list? the answer: "need you tonight." >> aflac! >> welcome back, everybody. from u.s. politics to the state of the economy, domestically and globally, our guest today can cover it all. senator judd gregg an adviser for goldman sachs and a cnbc contributor. senator, we take a look at what's happening in europe, we look at what's happening here with the markets. what do you get in terms of a as soon as of what's happening? >> not good. europe is dancing along the precipice. they have a massive debt, they haven't figured out how to handle it yet, young people are massively unemployed probably at 40%, tremendous social disruption could occur as they

try to put through the austerity program. i don't think they have a game plan for getting under the debt they've added. back in the u.s. here we have a debt problem being too. it's not at the crisis level in europe but if we don't get on it, we'll have a big problem. the simpson-bowles report was unfortunately ignored. but what we're facing in september is the mother of all lame duck sessions. you have a trillion of discretionary spending and adding about $2 trillion in revenue. if those two things execute in the proposed way, you'll have a huge slowdown in the economy next year. congress is going to have to step up and address this in december. they're obviously not going to do it in september. >> part of the reason you left the senate was because you

couldn't find people to work across the aisle with you. what happens in a situation like that where you have such a quick deadline facing you? >> i think the senate is still the one place in this government where you can get people to work together. the original gang is six is probably a gang of 40. a lot of people want to address this issue but they don't have leadership and leadership has to come from the white house in order to get this moving. >> senator gregg will be with us for the rest of the show. when we come more, we'll have more with donald trump. tdd# 1-800-345-2550 let's talk about the personal attention

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welcome back to "squawk box" on this tuesday morning, 7:30 a.m. on the east coast. pfizer reporting minutes ago, beating the street by 2 cents, revenues in line. the drug company's full-year guidance came in short of current consensus. and a powerful u.k. committee

saying rupert murdoch may be unfit to run a company. we're going to have much more just ahead. becky? >> thank you very much, andrew. the donald is back in the united states after a whirl wind trip to europe where he announced another real estate deal. we're going to talk about that in just a moment. this past saturday at the white house correspondent dinner, the president had a little fun with mr. trump. take a listen. >> my fellow americans, we gather during an historic anniversary. last year at this time, in fact on this very weekend, we finally delivered justice to one of the world's most notorious individuals. >> joining us right now on the squawk newsline is the man himself, donald trump, who is the chairman of the trump organization. donald, we hear you appreciated the humor.

>> well, i thought it was good humor. i thought it was delivered well. i was greatly honored. my daughter was there, ivanka. she called and said "daddy, daddy, the president just mentioned you." how good could it be? it was very good, very cute. >> it's good to be brought up in these speeches. it means you're in the news. >> it was fine and it was done in good taste. >> i wasn't at the dinner but joe and andrew said they appreciated it. >> after all we're hearing about spiking the football and the controversy between running ads with bill clinton and saying romney wouldn't have done it. so when he started into that -- >> there was silence in the room. >> i was assuming the worst or the best. >> if you really looked around the room, it became very serious. it was sort of mid way in the speech but i thought this might be ending. i didn't know what was about to happen. >> it was closer to the beginning. >> was it closer to the beginning? >> and they had a picture where

you're saying something, donald. but i wondered how you were going to respond to it. but it was done in pretty good taste. i thought the year before he was nasty with you. but you were in the crowd. >> not so much him, he was great. they had a third rate comedian named seth meyers who was nasty. he didn't do too well. i think the gentleman that did it this year was much better. >> jimmy kimmel. very funny. >> donald we shall missed you last week because you were in scotland. we know that trump international in scotland is getting ready to open. the golf course sounds like it's pretty phenomenal but you've been upset by the potential for these wend farms just off the zmoes. >> i bought 2,000 acres like seven years ago. it's considered the finest piece of land in the world for golf, it's the great dunes of scotland. you couldn't even walk on it,

let alone zone it for what i got it zoned for. one of the things i got it zoned for was this tremendous golf course. so we built this incredible course and not so long ago they announced they were going to build these ugly industrial wind mills out in the ocean, out in the north sea. this goes four miles along the north sea. they're going to build these who are -- horrendous looking industrial combines. they're very inefficient, they're destroying communities all over the world. you look at palm springs and what happened there. and they all need subsidies, they don't work well. when you need electricity, the wind isn't blowing, which is usually in the summer. the whole thing is ridiculous. they're destroying communities. they announced they were going to build it, which is not going to happen. i testified before parliament. i think did well and i think had

had an impact and i don't think where i am they'll be built. >> why would they put it right in front of the golf course anyway? >> it's not just this golf course, there's royal aberdeen, the crown skul jewel of scoutlt they're going to put some in st. andrews. i testified in parliament very strongly. i'm not a fan. they really are industrial turbin turbines, putting them in industrial areas, they can do it but you can't destroy landscape. >> so i not so much that they're using them butch it's where you put them? >> well, when you need it the least, in winter and certain times they blow so hard they explode in many cases. they are disaster. >> what? >> what they are doing, you see

it up in cape cod, other places, the environmentalists love them until they put them in fl bathe back yard. when you put them in their back yard of the environmentalists, they say no way, we're not having them. >> you think parliament will not go ahead with the plan? >> well, i don't think they'll be near my course, i can tell you that. i built something that a lot of people joe can tell you, not only is he a golfer, he's a good golfer, but he can tell you we're getting reviews. people are already saying this may be the greatest golf course ever built. if you look at the head of the pga tour in europe, sandy jones, and they're making statements like this. i didn't do all of this work in order to have wind mills being built two miles away. >> joe? >> do you like the fact i said afs good golfer?

>> donald, i'm fighting a battle with the wedge again. you know that. it a very sore subject. >> he doesn't love chipping but he's getting it. >> you get close to the green? >> for golfers out there, i'm now clawing my chips, if that tells you anything. it's a left-hand, low claw move that i do. i need a psychiatrist, not a coach. >> donald, let's talk politics for a second. big issue seems to be obama using the death of osama bin laden politically. where are you at on that? >> i think he has to use whatever he can use. he can't use the economy. i think he should probably try and get away with doing it. i know there's a lot of heat. >> so you would not criticize him for that? even some democrats have -- >> i don't criticize for

anything. if he's going to use it, let him try. if you're the president and you're sitting there and one of your brilliant generals and fobs come in and say we have osama bin laden, we know what he is, we can do one of three things, leave him alone, nobody is going to say that, we can go in and get him or hit him with a missile, either one of which is acceptable, i mean, i think 100% of the people in that position are going to say let go get him. >> fair or unfair that romney might not have? >> i think it's very unfair. anybody would have said that. >> he said -- after he said he needs to be killed. it was in the next paragraph, which they left out. the guy who said don't do it was biden. >> you could make the case that the fact that hooves in pakistan for years living in a mansion that i wouldn't exactly call a mansion but these are minor details but living in the

biggest house in the city by far right next to the military base and we give billions and billions of dollars, you could say why didn't we learn about this years before? in order, if you're president, how come we didn't learn about this year before. any president who is sitting there when the generals come in and sap we have them, who is going to leave him alone? not one person i know of. >> the murdoch situation, the committee there came out with a scathing report about the family suggesting that rupert is unfit to run the company. >> they should be so unfit. rupert is a bill guys. that's not my business. i would imagine other companies in the business probably did the same thing, whatever they were doing. it became a culture, especially over there, maybe over here. but i would imagine that rupert wasn't the only one. i know rupert. look, i know rupert.

rupert is as smart, as sharp. there's nobody. there's only one rupert. and to watch them talk about unfit, wouldn't they love to be unfit just like him. >> donald, real quickly, what is your business real estate? you told us you think there were great real estate deals out there. i didn't realize you meant in and europe. you're just back from georgia making the first big investment there, too. >> yeah, i was given the presidential seal by a great president. i mean, he is an amazing guy. we're doing something in the republic of georgia, it's an amazing place what's happened. i think it being studied all over the world for what's going on in georgia. this country could use it. they are through the roof. it's the number one country in the world in terms of up and it's amazing. i also -- we opened a major shopping center and apartment complex in istanbul, turkey,

with great partners, a great, great family from turkey. i did at that. i had an amazing time. i looked at istanbul, it's booming. you don't think in terms that much. i'm from new york. we think everything revolves around new york but then you start making the tour. you go to the republic of georgia and see everything is absolutely booming. then you come back to this country that we love and it's not booming, it's the opposite of booming. it very sad. >> all the formal socialists and communism say it moving toward communism -- >> that's a good way of saying it. >> you're always reading. >> that would have really chafed your hide and up missed it. >> i thought it answered the request i have, which is why are those countries booming and we aren't?

you summarized it concisely in a way andrew would i think agree with. >> they've learned for us -- >> now we're learning from them. >> it a good statement. they're reverting to us and we're reverting to them. >> all government moves left and we're trying to catch up with them. >> you saw how everybody was treated equally in those countries. it was awful and they were all poor but they're all treated equally. let try that here. >> leaders from all over the world are actually going to the republic of georgia and studying that experiment. i mean, they're studying what the president, who is an amazing guy, what he's doing. when you go there and you go to a place like batumi, which nobody's ever heard of, and then you see that it's going to make las vegas look like small time in five years, it an amazing thing. it's amazing what they're doing. they've done it in a period over about eight years. we could learn from them. they learned from us in the old

days. >> how is their relationship with russia after the really difficult time they had? >> well, it not exactly cordial but a pipeline runs through it and lots of good things are hatching but certainly it is not great but it not horrible. i mean, they subsist. >> donald, thank you. it's always great talking to you. we'll talk to you again next tuesday. >> very good. i look forward to it. >> up next, a random walk down wall street with burton malkiel. we'll present him with his book award. tears in his eyes, i guess, as i look over to him. he knows it's come. and next we'll talk to domino's pizza coe. can he deliver from investors? and first, though, check out the chairs of pf chang. the company is going private. a true upper east sider -- or

west sider would eat a a chain, right, andrew? >> love p.f. chang's, love it.

>> we are proud to be kicking off a new segment this week, the "squawk box" book club, featuring the world's most

prominent business authors. we are giving them our blue chip book award. we're going to be building a library of classics that are must reads for any investors. they'll be featured on our web site. >> and it's time now to present another blue chip book award. it goes to a random walk down wall street by burton malkiel. the book has long been established by a must read among when you're first starting a portfolio, it is one of the great classics on investing. burton malkiel joins us. it's great to see you this morning. >> thank you. >> this was one of those books that explained to people that maybe stock picking was not such a brilliant idea. >> i think the way that i put it in the first edition was that a blindfolded chimpanzee throwing darts at the stock pages, that

chimpanzee would pick a portfolio that do as well as the experts. >> so the world has actually moved in your direction. >> slowly, slowly. now it has. about 26% of mutual fund assets are now indexed. >> if you could write the book again 30 years later -- what are we, 30 years later? almost more. >> almost 40 years later. >> what would you do different? would do you anything differently? >> first of all, i wouldn't do anything differently about its basic message. the beauty of the thing is that it works. last year over 80% of active managers were outperformed by the index. normally it's about two third but the one third that win one year aren't the same as the ones that win in the next year. so i wouldn't have changed one sentence of that. what has changed is that there weren't any index funds when i first wrote the book. it was reviewed at one point by a market professional in "business week" who said this is the biggest piece of garbage in the world.

now the world has moved in the direction of "random walk" and now not only do you have mutual index eveneds but you have an etf revolution and these are basically index funds. >> you're in the tenth edition of the book? >> it's in the tenth edition. now can you put a portfolio of etfs together, almost zero expense and any investor, including the individual inve investor isn't going to have a mediocre performance, it's going to be above average performance. >> yet we have so many individual investors afraid of the market based on the last four years and the fallout from 2008. does that worry you there's a generation who aren't going to be investing? >> it worries me a lot. it's one thing that i preach in the book that unfortunately the individual investor does just the wrong thing. they put more money into the market at the top of the market

in the early months of 2000. during the dot-com bubble than ever before. they then took the money out when the market had a low in 2002 and then in 2008 when the world was falling apart, that's when the money all went out. and this is one of the main lessons in the book, my god, you'll never time the market. i've never known anyone who could consistently time the market. when you do it, you're likely to get it wrong rather than get it right. just go into your 401(k), keep putting the money in. when everyone says the sky is falling, don't listen to them, just keep going. >> and you just mentioned etfs and trying to put a portfolio together. is that a better alternative than just picking an index and saying i'm doing that? >> i think if you did one thing, if you were just going to buy one etf i would buy a world equity etf. that's -- i mean, that ought to be the core portfolio.

there may be changes you want to make around the edges -- incidentally, i don't mind if you buy individual stocks but do it if the core of your portfolio is indexed and then you can buy individual stocks with a lot less risk than if your whole portfolio was done that way. >> you said that real estate is where you think is the best investment now. if you do, do you think rates are appropriate? >> i think rates are appropriate and if you wanted to have a position in real estate -- first of all, you'd get it with a broad-based index fund because there are some rates in it. if you want to do overweight rates, buy a rate index fund because the rate index funds do very, very well. if in fact we're going to be in an inflationary environment over the next decade, rates would be a very good place to be. >> have you seen the actual award they're giving you here? >> i have not. >> it a little wooden plaque. don't you think cnbc could give

you something like a golden book or something? >> i have the award actually. i was going to present the award to him -- >> the box is nice. >> it is a nice box. i wasn't going to open this because we have another award. maybe we should open it for you. my other question for you bonds right now, how what do you think about the bond market? what should average joes be doing? >> i'm very worried about the bond market. that's one of the things that has changed. we're in an age of financial repression and i think people should remember a bit of history. we tagged interest rates after world war ii at couldn't be higher -- government rates couldn't be higher than 2.5%. we kept a peg on into the 50s. the peg was just gradually removed and bond investors suffered enormously in the whole period from world war ii until

1980. now, the government did well. the debt to gdp ratio in the u.s. was 130% in 1945. it was 30% in 1980. and that's what worries me. with the paralysis in washington, with our inability to do anything about the, you know, anything real about the deficit, we're going to get -- we're going to solve the problem but on the backs of the bond holders. i say don't buy bonds. >> we pay rates at 2%. it's even worse. >> but it goes to 2014, not for 30 years. >> burton, congratulations. here is your award. >> oh, i thank you very much. that's lovely. >> you are now an official member of the book club. we'd love you to sign the book, if you could, with a pen over, there judd. thank you, sir. >> someone who will not be getting that award is judd gregg if he doesn't like it. >> judd, thanks so much. >> burton thanks so much. >> we got to have you back.

i want to know what you think about gold. >> you're not getting one. >> last week we brought you "the disruptors." the next wave of big internet stars. "wired" magazine is kicking off their fourth annual business conference today, this year's theme, disruptive by design. julia has a big interview there. >> they've got a great lineup today. we're joined by chris anderson, editor and chief of "wired" to tell us a little bit about what this conference is about. you say businesses need to embrace disruption. what does that really mean? >> it's comes out of the austrian's notion of create a disruption. the idea that things work best when they fall apart and are

rebuilt in a new way. the silicon valley model is take an industry, tear it apart and rebuild it in a cheaper, better way. >> what kind of disruptor is facebook? >> it's a disruptor in a number of ways. it realigns the relationship between people and the internet. your old relationship was with the browser and now it's with people and the social graph. >> we headed into this ipo expected later this money. how do business need to evolve in light of facebook? >> facebook makes you think about the social graph. they're saying this is the way people want to einteract, you have to think social. >> you have a number of big social people. you also have alan ma lalia

ford. >> i think cars are the biggest industry out there. look at what's going on with energy technology and the electric grid and independence from fossil foouls in lithium, polymer batteries, in the software that's onboard. they're apps on wheels the way america will rebuild their power will be by building on the strength in the technology. >> who are the disruptors and who is failing to be disruptive now? >> one last moment in the car industry, tess la, the electric ka industry, is redesigning the car as if it were a tloolaptop, electric motors, it might as well be apples on cars. i think energy is another place where we're seeing tremendous

innovation. obviously we're hitting a dip in terms of the public markets but what we're going to see in solar has just begun. >> unfortunately, i have leave it there. find much more online on cnbc. >> coming up, time to place burton malkiel's work of art into the squawk library. and don't miss max, who will point out every day it's a banana republic. how much that was, mack? >> look at that, on our book shelf. [ barking ] appears buster's been busy.

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>> in the future we'll able to talk to each other with our thumbs. >> at 8:30 a.m. eastern, he's going to join the "squawk box" book club for his treaties on compassionate conservatism. "squawk box" starts right now. ♪ welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. our guest host this morning is judd gregg, the former senator and international adviser for goldman sachs and governor from new hampshire. still contends that maple syrup from new hampshire rivals that from vermont. >> there is no maple syrup from vermont. >> what? >> you and howard get into it. >> snow. they don't have very good snow. >> is there a distinction between the maple syrup?

>> oh, absolutely. >> a very naive question. >> is there a distention between wine from napa and wine from epping? you know, from new jersey? >> andrew. >> i think these are different issues. these are different issues. >> let's check out the u.s. equity issues that have been meandering around. we'll get adp and the claims numbers. >> and austin goalsby thinks the numbers will be bad. >> are we allowed to say in tha? >> you said it yesterday. >> i did a little bit. and austin saying three months ago to expect that. >> i wasn't saying that. did you it yesterday. >> i think i barely said it. i intimated he was right about

it slowing down. i didn't say he said 125. did you say 125? >> i did not. >> i just did again. >> delta airlines trying to avoid pain at the pump by buying a refinery. it's pretty unique here. the company confirming plans to purchase the the cone co phillips refinery. delta ceo richard anderson spoke to us in the last hour. >> the price of this refinery, it's a great asset and essentially for the price of a wide body airplane, we can own this refinery and control much more of our supply chain in terms of commodity costs. so it's generally big ideas like this can create a lot of value for your shareholders. >> and delta stock price is now up more than 10% since cnbc's kate kelly first broke that

story about a month ago. >> but in general, if it wasn't for i know the carbon footprint and the jet fuel itself, but if it wasn't for that, you get to keep the jobs, refinery doesn't get shut down. are you okay with the subsidy of 30 million from the -- >> i'm fine -- >> it's a state subsidy, not a federal subsidy. >> i wonder if other airlines are going to follow suit. >> you're okay -- >> the vertical integration? i'm -- in other news this morning, u.k. lawmakers reducing their results on the rupert murdoch scandal. >> we did get the headlines from the parliament committee that heard testimony from rube ert and james murdoch in july, saying the company exhibited willful blindness.

it said mur dak did not take steps to become fully informed about phone hacking. this culture we consider permeated from the top throughout the organization and speaks volumes about the lack of effect of corporate governance. they came to the conclusion that rupert murdoch was not fit to run a major company. since this report came out, i've been digging through the minutes, how the politicians came to these conclusions. in most instances they were voting to use this word, whether mur ddoch was fit, they were spt down the middle and the conservatives voting against it. the word "fit" has very strong implications. their equivalent of the fcc is looking into whether the company

is a fit and proper overer in beskybe. we should know the politicians did not disagree at all on the facts that three former news of the world journalists misled the committee in previous testimony. that was tom crone, les hinton, most recently the former coe of dow jones and colin myler who was the -- is now currently the editor of "the new york daily news." >> we had donald trump on in the last hour. he said he wishes he could be so unfit to be running something like this. i guess we're going to start to get reaction from people about that specific issue and see if it carries more with it. >> i think that he has done well to put such a capable deputy in

place in terms of chase carey being there last august on their earnings call. he said if he were to be hit by a bus, it's for chase carey to be running that company. investors like that story but it's been a murdoch company for so long, it's hard to imagine that maybe the murdoch name could be completely wiped from this company has been certainly we haven't been able to get our minds away. >> what's the politics in england? is it the conservatives versus the liberals in how intense they're going to castigate murdoch? or is it a general piling on of both parties? >> it's generally a piling on of both parties. last week when they were in front of this, the big criticism was that murdoch owned papers

only endorsed what they viewed as the most winning candidate in any given election because they wanted to protect their own commercial interest and they said you scratch my back and i'll scratch yours and i'll scratch it by endorsing you in "the sun," one of the most powerful papers. the coziness between 10 downing street and murdoch as all of this has been unfolding is a big point of contention. >> kayla, thank you very much. after five years at the world bank, president robert zoelick will be stepping down in june. why he now thinks we still need the world bank and what's happening in europe right now. thank you very much for joining us this morning. >> glad to be with you. >> let's take a look at europe first. we have seen a lot of new money that has been pledged, none of it coming from the united states. but is it enough right now to stem the biggest problems there?

>> well, i think right now europe depends on what happens with italy and spain because those are the two big players and the ones in some ways are too big to fail. they both are undertaking fiscal consolidation and structural reforms but that's very hard to do in a no-growth environment. i think one of the challenges frankly not only for europe but for the united states is to try to undertake structural reforms while you've still got growth. >> when you look at spain and italy and around the rest of europe, some of the austerity measures is getting some real pushback from the population and you're looking at what what could happen in france, with sarkozy could lose the election. >> i think some of the comments that the contender for sarkozy has made could make markets

somewhat nervous. the germans on the one hand are half right about the need to make the fundamental reforms. where i think they've been a little bit too tough is recognizing whether there's other actions that can be done that can make it a little easier for people like mario monte in italy who are doing the right things but have to support the politics. my guess is you'll see out of the haland election there will be agreement to try to add to investment facilities, i wrote about the european investment bank to try to support some the overall structural reforms. this is going to be a very tough period. >> you said it could makes markets nervous. does it make youer er you nerv? >> yeah. europe is one of the big uncertainties for the world economy. >> if had you to put money on it, do you think this is something at the end of 2012 we'll have our arms around and will have as good a grip as we

have now or will it get worse or better? >> i think it's a long stumbling through. there's a lot of deleveraging that has to take place in europe. we see the effects of that globally because european banks are global players. for a number the economies it's going to take a while. since europe can deal with the issues like spanish bank, you start to restore some of the market confidence. if you ask my best guess, i think at the end of the year it's still going to be stumbling along, and that's better than something falling apart. >> it is better but stumbling along for an awfully long period. you point out we need to take care of our own house back at home. we have not given any more money to europe. do you have think that's the right call? >> yes. i think europe has the resources and they're backed by the imf. the core is for europe tie dress these issues, which it should be able to do.

>> in terms of what we need to do, we have judd gregg sitting on the set with us, he's pointing out we're facing this huge fiscal cliff. what does need to be done? >> in the u.s. so much of the focus has been on the monetary policies, which were extraordinary. i'm not disagreeing with him, but you can't rely on those alone. you're going to have to deal with the fiscal issues, that judd knows are a tremendous amount but you're going to have to deal with what makes the united states more competitive, the so-called structural agenda, issues on energy, bringing private capital into the infrastructure sector, some of the things on the education side. while the united states has better growth than europe, it is also not out of the words. as judd can tell you this fiscal cliff at the end of the years add as new degree of uncertainty for the united states, plus all the new regulations coming out. >> as you leave the world bank, your reputation there is very strong.

you brought fiscal responsibility to the world bank and transparency. where do you see the big issues coming at the world bank that the world bank is going to have to deal with? what do you see its role and how do you see it raising its visibility with the american people in a way the american people continue to support or congress continues to support its efforts? >> one of the huge changes in the world and you see it in this financial crisis is two-thirds of the growth in the past five years came from developing countries. the world bank play as role with that on the financing side but equally upimportant on the poli side, trying to make sure there are safety net procedures without busting budgets and transparency. that's in the interest of europe and everybody else because those are sources of growth going forward. those are also going to be challenges. a lot of countries now in the developing world are concerned about what's the so-called middle income trap.

how do they keep their productivity moving forward. that goes back to the same structural agenda i was talking about for europe and the united states. you know, some of that could be pushed with more open trade issues because that's a way of trying to expand competition, some of it's infrastructure development. but i think one of the things you're going to hear more about, even at the upcoming g-20, if you're going to really create a basis of productivity and growth, you have to get beyond some of the pure monetary and fiscal policies of the day to the fundamentals of growth on the structural side. >> jim yong kim is the successor. was that your choice? >> judd knows him quite well. he was the president of dartmouth. that's where they have the new hampshire maple syrup.

>> what are you going to tell him? >> i'm going to go over some of the issues i think are on the agenda, ways to approach it. but i also believe in transitions. it's important for the new person to bring their own pressure ideas. >> president zoellick, we want to thank you very much for your time. routinely the guests that we have here all talk about what a huge impact you've had on the world bank and what a huge positive impact it's been. thank you for your time. we appreciate. >> coming up dominos pizza reporting earnings. the chain engineered a turn around -- >> is that your breakfast over there? >> it's all of our breakfast. >> the stock has more than doubled from last year. it's up $2 from the height of the financial crisis but it missed its numbers today. we'll get an explanation from patrick doyle, the ceo.

and richard branson, a squawk icon and rebel. we're going to induct him into the squawk book club. tomorrow on "squawk box," squawk goes high performance. ♪ >> the ceo of ferrari north america will join us, and he's bringing some toys. don't miss "squawk box" starting tomorrow at 6:00 a.m. eastern.

>> that's good pizza. dominos pizza delivers results this morning. dominic ceo patrick doyle joins us now. >> patrick, he just wolfed down a whole slice. i did, too. >> barbecue, onions. >> the breakfast of champions. >> it's not colds pizza. >> do you do a breakfast pizza? >> we do it a few places. for you guys we could whip one up. >> we're looking at numbers.

you've probably seen the stock this morning. it got all the way down in single digits back in those scary days three, four years ago and has been up above 40. since then it's indicated lower on earnings that were a couple of pennies shy of expectations and revenue also a little bit light. what happened? what do you attribute that to, patrick? >> yeah, i mean, our domestic comp came in right in the middle of our long-term guidance. we guide to kind of 1% to 3% it, came in at 2%. i think consensus was a couple of points higher than that for the domestic business. i think that's why you're seeing what you're seeing this morning. >> sometimes it's not the company that it gets things too high but a lot of times the analysts are looking at something or body language from the company. what wasn't quite up to speed if you had to attribute it to something? >> i mean, i think, you know, in

terms of the first quarter, the international was phenomenal. another just terrific quarter. eps was up 12%. we paid out a $3 special dividend. so all of that's positive. i think in terms of reaction this morning, you know, and the 2 cents, it really comes down to domestic. >> and what would that -- was it the weakness in the macro economy or gas prices or input costs or what would -- i mean, it was about a $20 million shortfall from where analysts were for revenue. >> on the revenue side it's been commodities. about two-thirds of our revenues come from distribution business, selling the food to the stores. so the revenue side is really mostly about commodity prices, which have been very good to us. commodities are staying in a nice range. we're kind of thinking up 1% to 2% this year. so far that's looking good. so, you know, the real thing i

think that they're looking at is the domestic same-store sales number. we were up 2. i think they were looking for a couple points more than that. but overall in terms of the business, you know, the quarter and the domestic side is right in the middle of our long-term guidance, you know, at 2%. so, you know, i think that's the reaction you're seeing. but overall good, the international business continues to boom, technology continues to play well for us. >> so delta just bought a refinery. you guys thinking of buying a cheese company or a dairy farm or something? >> no, you know, i don't think so. i don't think so. there's a supplier out in denver that does a great job for us, supremo foods. i don't think we're going to be buying them any time soon. not enough room for all the cows here in ann arbor. i think we'll leave that one alone as well. >> are you worried about higher costs for all this stuff, though? >> we do. and over the medium term while

we don't own a lot of our stores, you know, the health of our franchisees is critically important to the business. that's what ultimately generates growth. i think as people look down into the numbers in the first quarter, they're going to see that it was the real high point for us. store level profits looked very, very good in the first quarter for our corporate stores and we know our franchisees did well. commodity prices, they're looking pretty benign. that's positive. the other positive listening to some of the things coming out of europe, our european business has held strong. our comp on international was 4.7 for the first quarter, rolling over the biggest quarter we had last year of 8.3. so it was a 13% two-year comp. europe's hanging in there for us, which is really good news. i mean, that's one frankly i've been watching very carefully and

europe still is holding strong for us. >> when did the advertising campaign kick off? would you call that a big success for you, patrick, the one where people -- i just sort of counteracting some of the, you know, when you have a business for 20 years that everyone knows about, you kind of reinvent it i guess, right? >> that's right. it started at the beginning of 2010 and that first quarter two years ago now is up 14.3%. >> wow. >> and, i mean, it's phenomenal. the year 2010 was up 9.9. so we've got this new base of business, consumers have a different relationship with us. we kind of brought the whole business up and now we're growing off of that new higher base of business. but the relationship with the consumer because of the way we've communicated with them is incredibly strong now and really better than it's ever been. >> great. thanks for coming on. thanks for the barbecue, chicken and onion. i told that you. >> it was a good slice, very

good slice. appreciate it. >> haven't one yet. >> why not? >> because it's will power. >> you don't have forks and knives and i just saw andrew and joe just sort of wolf it down with their hands. >> i'll give you a plate. >> my wife is always on me about etiquette. if i were to do that -- >> it's pizza. >> we have 36 more minutes to tempt you with you. >> when we come back we'll have more stop stories and richard branson's book "screw business as usual" is about to win a blue chip book award. still around, we'll be right back. it's just another way you'll be traveling at the speed of hertz. an investment opportunity you didn't see before. fidelity's next generation ipad app lets you see what's trending around the world, as well as what over a million fidelity customers are trading throughout the day. and advanced charting lets you customize your views

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welcome back. a powerful u.k. committee said rupert murdoch is unfit to run a company. the media mogul is blaming a rogue tabloid, says he wishes he it h closed down "news of the world" even sooner. p.f. chang is skyrocketing because it's going public.

it's indicated up. >> and we've been kicking up the "squawk box" book club, exclusive books that drive the conversation in the business world, looks like "barbarians of gate" and "accidental billionaires." let's present the next award to richard branson store his book "screw business as usual." sir richard joins us now via skype. we should call it the e-book award given that he's piped in over skype this morning. good morning to you, richard. >> good morning. >> i should note you're the author of "losing my virginity." we have a couple of books we

could induct this morning. getting back to the idea of screw business as usual, this idea of capitalism and caring for people, some would say it doesn't go hand in hand. how do you feel about it? >> first of all, most businesses set up only succeed if they can make a difference, otherwise there's not much point of them being there in the first place. so that applies to the vast majority of businesses. what we're saying in the book is that we can't just leave things to politicians and social workers to get on top of the problems of the world. business people have particular skills that sometimes politicians and social workers don't have. and if they can use their entrepreneurial skills to get out there and tackle some of the seemingly intractable problems of the world, the world will be a better place. and so it's just really trying to unite the three forces to try to get on top of, you know, most

of the issues in the world. >> if you're a manager of a publicly traded company today, how are you supposed to do this? and i ask this seriously and i know there's a number of major companies that talk about sustainability and talk about doing lots of things but ultimately they are working for the shareholder and they are ultimately thinking about profits. no? >> yes, conventionally that's the case. it's just quarterly profits, profits, profits. and, you know, obviously profits have got to play a big part, otherwise the companies are not going to succeed, they're not going to be able to employ people and, you know, ultimately the company will fail. but if the company becomes a force for good, 50,000 employees can feel incredibly proud of the company they work for and go into the pub in the evenings and be very proud that they work for x company, they will work that much harder. so the shareholders should let

managers, you know, manage the companies in a way that the companies and the employees can be very, very proud of what they're doing. and so if a certain amount of resources is spent on helping other people in maybe the company's local community or with a bigger company helping nationally or internationally company helping globally, i think the shareholders should welcome that because i think it's good for the brand, it ultimately good for the company and it's certainly good for the community that the company trades with. >> what kind of feedback to you get from ceos when you approach them with in? i assume some good but also i imagine some bad? >> generally good. we've got people like ben & jerry, who work with us on this initiative. that's an example of a company that built a very successful brand but made a difference in the world. i think if it hadn't been making

a difference in the world, we would never have heard of ben & jerry's. even a company like coca-cola, who i compete with in certain parts of the world, they've got chief executives who around the world are trying to make a difference in their communities. and you know, because they've got a leader who is genuinely trying to make a difference and lead the company in a positive way, you know, throughout africa, you know, they've got a massive distribution network, they're doing good things. so if everybody company was to do that, i really do believe that most problems in the world could be resolved and i -- at virgin i spend maybe 60% or 70% of my time on setting up not-for-profit enterprises, which i think do make a difference. >> how do you find good things, let's say a company wants to

press for charter schools or private vouchers, which are not consistent with the liberal mystique of the "new york times" but are pressing forward on getting a better educational opportunity to especially inner city schools, inner city kids. now do you define what's good? who makes that determination in a public company which is subject to constant scrutiny from its shareholders and from the press? >> well, look, i think that -- i do think that the rules of public companies need to be addressed. up kno you know, we've actually considered getting a group of global business leaders together to put forward a manifesto for public companies to consider changing the rules that they, you know, the current so-called rules that they abide by. but i think as far as what -- i

mean, what problems that companies tackle, it's up to the conscience of the person who is running the company and the employees of the company to choose which areas they think they can make a difference. for instance, virgin, we've taken on conflict resolution, taken on the elders who go into conflict regions and try to resolve conflicts. most people in the world would accept that's a good thing, if you have conflict, you can't have commerce, you can't have schools, you can't deal with the health problems of people. you know, so i think -- but generally speaking you can come up with projects that your shareholders and your staff can unite behind. >> richard, it's a good message. i'm sure it's a controversial one but we appreciate you being

here this morning. sir richard branson, mack is going to add a copy of your book to the squawk book shelf and we'll get a signed book as well. i hope you have some fun on the beach today, if you can. >> there goes the book. like andrew said, we'll get a signed copy. we'll have to auction this library off at some point. >> when we come back, they say success doesn't come in a vacuum but in this case it does. james has made his career on a product that sucks. stick around, squawk will be right back. [ barking ] appears buster's been busy.

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welcome back to "squawk box," everybody. you see there are some green arrows, dow futures up 13 points, s&p up bay fraction of a point. a avis getting a boost this morning, citing strong user demand. >> let's get back to the disruptive by design conference. with us is james, he has with him the new dc-40 vacuum which launches actually today. you've been called edisonian.

let's see the vacuum. where is it? >> it's right here. it's dc-41. it's on a ball and it maneuvers quite easily. i got fed up with the vacuums with four wheels, very heavy. i wanted to make a light one that's easy to move with. it's very light and highly maneuverable. it weighs about 4 kilos so it's very light. when you want to do the edges, you pull this up and you have a wand to do the edges with. >> it can go under a couch or something? >> my wife has been looking for a new vacuum for about 20 years, she's been talking about that. >> can you get and you couch with that? the ball might -- >> the suction nozzle.

>> you can run along the edge like that and half the cleaner head goes under the coach. that's how do you that. it simply goes into the upright position. there's no pedals. you just shoot off like that and it's incredibly light. >> how much does it cost? >> yes, it more powerful. it's about $450. it's out today. you empty it by doing that. >> how long did it take to you design this thing? >> about three years, three, four years. but don't forget, i've been designing vacuum cleaners for quite a few years. originally i built 5,126 prototypes to get the product right. since then we've gone on and on investing in developing in better and better technology. >> a couple years ago we had that fan on, didn't we, that didn't have any blades, really cool looking? >> yes, the one that blows. it multiplies the air flow. takes in a relatively small air flow at the bottom and

multiplies it 20 times. in your introduction you said i make things that suck opinion. i make things that blow as well. instead of using a hot air dryer, a blade scrapes the water off your hand. >> that works great. 20 seconds your hands are dry. >> it's quicker than that, ten seconds. >> who physically makes these products for you? >> we do in malaysia and singapore. we run the factories, we own some of the factories. we rent other factories. we do the assembly, the buying, the purchasing and all the quality control. we want that level of control. >> james, there was a piece answered want you to be able to explain what you mean by that this people talk about green engineering and being an environmentalist. you made the point there's so

much noise associated with trying to be green that you have don't even try to focus on that. it's more than you want to do things renewable, solve problems obviously with water, but a lot of it gets lost in the shuffle if you're too concerned as an engineer, that just being green can be self-defeating. >> young engineers want to solve problems. they get angry about the fact that they aren't generating enough power, the fact that we're wasting water, the fact that we're using too many materials. young engineers just have a b n burning desire to solve those problems. engineers can some those problems. politicians can't solve them, engineers can. we have to give power to young engineers to solve them.

we develop special new technology measures. they work because they go at offer 100,000 rpms, four times faster than any other motors. our engineers want do that naturally. they're not doing it because of publicity they can get or to go around say they're being green. it's just what engineers do. >> have you got a solution to making it really attractive to work your butt off in school and become an engineer? you sort of just have to have that will, don't you? we're constantly hearing over here that we don't educate engineers anymore. a lot of people say it's so hard, i don't want to spend four years of college locked in my dorm room studying, you know, calculus. how can we -- do you have to be born with that desire? >> well, no, you don't. and a lot of people are brought up in an environment like i was where engineering wasn't discussed at all. but what we're doing, my foundation is doing in england and now in chicago is we're

doing afternoon classes and we bring in -- what we call educational boxes, which is vacuum cleaners that people can take to bits and put back together again. the idea is that they learn from that how simple products are and that engineering is in fact quite simple and rather exciting. and we're having some results. there's one child who has said -- he was absolutely determined to become a lawyer. after about three of these classes, he said i want to become an engineer, that's much more inspirational. hopefully these classes will work. >> that is doing god's work. not only is he becoming an engineer but you prevented another lawyer from coming into the world. branson should have heard that in terms of doing good for corporations. now that is good. >> in america the trouble is you spend more money on legal actions than you do on research and development. >> i know. >> that's a great shame. >> we need four lawyers for every individual. in japan it's like one for every

4,000. thank you very much. >> that's the worry. that's the worry. japan is -- and singapore and china are producing many, many times more engineers than we are and you are. and that's starting to get reflected in the number of patents filed. but technology is the future. >> we have lawyer, they have engineers. how's it working? >> james, before you go, what's the next big invention or directionally the next thing you're looking senate. >> we're very excited about electric motors. they can transform things like hand dryers. but we're looking at materials, nano technology. they can take the place of copper, which is very expensive. so we're doing lot of research into materials ourselves and through universities. >> all right. we'll keep an eye on all that. >> james dyson, thank you. were you a lawyer? >> yes, i was. >> are you going to a 12-step

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welcome back to "squawk box," everybody. guys, we've been watching what's happened for the month of april. carl, eye em sure you saw this already. we did see the dow barely eke out again with both the nasdaq and the s&p coming out. >> i noticed that the dow is down in may for four of the past six years. did you see that, becky? i mean, the sallie may thing is going to pick up some things of how it's talked about in the markets. i see sam has a note out this morning that it might not be the absolute right call. we're also going to have the head of the squawk. remember the best one-day pop? of course, lee is at the fed conference, at the milligan conference. he'll talk about some fed

policy, as well. that's coming up at 1030 a.m., eastern time. we're not driving any ferraris like some shows. >> no, you've just got really important news to bring us. that's going to be great with the feed speak that's been out. so far, it seems like they're going different right now. >> of course, it's part of a slew all week long. and some data. and one interesting thing, interesting correlation between monthly auto sales and the inverse of the unemployment rate. if you chart them, chart by chart, it's a very similar picture. so if the numbers today are really good, maybe that means something for adp tomorrow, claims on thursday and a big nonfarm number on friday. >> all right, carl, thank you very much. >> you look beautiful in that pink today. gorgeous, darling. >> she's pretty in pink, isn't

she? >> yes, she is. >> if she was in red, it would be a different story. >> don't ask about that. >> we will see you coming up at the top of the hour. >> when we come back, in the pizza box, it says -- it looks like tony is not managing -- >> what? >> don't say that. >> it's on there. back, we're going to get some final thoughts from our guest host. where is it?

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♪ >> this is not what i thought it was. oh. >> anyway, our guest host this morning has been jeff greg. we solved global warming. >> we did. that was a very good job. excellent. >> whatever you said, i believe. >> you know about the crystals in an arctic. they found out that the entire planet was just as warm. >> that's absolutely true. >> and we went into the ice age and we've been coming out of that. anymore questions for jud? >> i have a question, but we don't have enough time to answer it. he's going to have to come back. we were going to talk about that. we talked about somebody during the break. we literally don't have time. that's a teaser. >> we own him. he -- >> i'd be happy to come back any time.